The Home Mortgage Disclosure Act (“HMDA”) was enacted by Congress in 1975 and requires certain financial institutions (e.g., lenders) to publicly disclose data about housing-related loans and applications for such loans. The publicly-disclosed data (“HMDA data”) may be used to: (a) determine whether financial institutions are serving the housing needs of their communities; (b) assist in directing government officials and private investors to areas that may need investment; and (c) identify possible discriminatory lending patterns and thereby assist regulatory agencies in enforcing compliance with antidiscrimination statutes.
Since HMDA was enacted, there have been periodic changes to the HMDA data required to be disclosed by the financial institutions. For example, initially, a financial institution was only required to disclose data related to the geographic location of originated and purchased home loans. Today, HMDA data has been expanded to include data about denied home loan applications; the race, sex, and income of the applicant or borrower; and the price data for some loans. Accordingly, with some exceptions, a financial institution is required under HMDA to report the following data:
(a) the loan or application, such as the type and amount of the loan made
(or applied for) and, in some circumstances, its price;
(b) the disposition of the application, such as whether it was denied or resulted in an origination of a loan;
(c) the property to which the loan relates, such as its type (single-family, multi-family, etc.) and location (including the census tract);
(d) the applicant's ethnicity, race, sex, and income; and
(e) the sale of the loan, if it was sold.
In addition to the changes in the requirement of data to be disclosed by HMDA, there has also been changes to the required format of the disclosed data. An example of a change in the required format is reflected in the disclosure of the property location information, which is reported using census tract information provided by the federal government. Census tracts may vary with each census reporting year. Accordingly, because the same property location may appear in different census tracts depending upon which census data is used, it is difficult to compare HMDA data for years that use, for example, the 1990 census tracts with HMDA data for years that use the 2000 census tracts.
The number of loans and applications each year that require the public disclosure of HMDA data is in the tens of millions. Financial institutions are required to disclose HMDA data annually, in a predefined format, to the Federal Financial Institutions Examination Council (“FFIEC”). The FFIEC consolidates and summarizes the HMDA data received from the different financial institutions and subsequently releases this data annually to the public via a publicly accessible database or through distribution of the HMDA data on a storage media, such as a Digital Versatile Disk (DVD).
The version of the HMDA data released to the public is loan-level HMDA data that is depersonalized so that information relating to the borrower or property can no longer be identified. In addition, the FFIEC may also release to the public summaries of the loan-level HMDA data in order to make the large amount of loan-level HMDA data manageable and useable. For example, a summary report may be published for each mortgage lender by metropolitan statistical area (“MSA”), another summary report may be published that aggregates lender data for each MSA, and yet another summary report may be published for the entire United States. MSAs are defined by the White House Office of Management and Budget (“OMB”) and comprise a list of geographic components (e.g., counties or towns) surrounding an urbanized area. An example of an MSA as defined by the OMB is the “Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area.”
Because HMDA reporting requirements and formats have changed over the years and because the public HMDA data is only published on an annual basis, it is difficult for an analyst to conduct an in-depth analysis of this data. In particular, it is difficult to perform any cross-year analysis of the HMDA data. Moreover, mergers may also complicate analysis of HMDA data. For example, when a financial institution acquires another financial institution, the HMDA data for years preceding the acquisition will only reflect the acquired institution's relationship to the loan. The HMDA data published by the FFIEC is not updated to reflect the acquiring institution's relationship to the loan.
Thus, direct analysis of HMDA data may take inordinate amounts of time, typically requiring computer code to be written each time a specified analysis is undertaken. No existing application or tool effectively reduces the processing requirements for working with HMDA data so that data analysis may be conducted without writing new computer code and within user-friendly time constraints.
HMDA data may also be linked to and processed with other relevant data sets such as U.S. Department of Housing and Urban Development (“HUD”) data, lender data, and geographic reference data. However, no centralized processing mechanism exists that integrates HMDA data with other data sets, or allows for user-friendly visualization and processing of HMDA data and other data sets.
In addition, government-sponsored enterprises (“GSEs”), such as the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) may have HUD goals they are required to meet. These goals may include serving under-served area families, such as families in economically depressed areas where lenders tend to shy away from doing business. Another goal may be serving a certain percentage of low-income families, defined by having an income below a certain percentage of the average income for the area. No tool presently allows GSEs or other users to capture migrational patterns or other trends that allow the GSEs to project a business strategy that will help them achieve these HUD goals.
Systems and methods consistent with the present invention address the difficulties discussed above and allow for user-friendly processing of HMDA and other data.